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Bill Summary · HB 1190

Summary of House Bill 1190: Income Tax Exemption for Teachers

Purpose and Intent

House Bill 1190 (HB 1190) was introduced to create an income tax exemption for teachers in the state of Arkansas. The primary goal of the bill was to provide financial relief to educators by exempting a portion of their income from state income tax, thereby recognizing their contributions to the education system.

Key Provisions

  • Income Tax Exemption: The bill proposed an exemption from state income tax for the first $50,000 of wages earned by teachers.
  • Definition of a Teacher: The bill defined a teacher as an individual who:
    • Is employed in a teaching, instructional, or educational capacity.
    • Works for a public school or an open-enrollment charter school.
    • Spends more than 70% of their contracted time engaged in student instruction for grades K-12.
  • Effective Date: The exemption was set to be effective for tax years beginning on or after January 1, 2025.

Fiscal Impact

  • The estimated fiscal impact of the bill was significant:
    • FY2025: Projected general revenue reduction of $29.1 million.
    • FY2026: Projected general revenue reduction of $58.2 million.
  • The fiscal estimates were based on data from the Arkansas Public School Computer Network, which indicated approximately 33,645 potentially eligible teachers (32,310 public school teachers and 1,335 charter school teachers).

Taxpayer Impact

Teachers employed in public schools or open-enrollment charter schools would benefit from the proposed exemption, allowing them to retain more of their earnings. This could potentially improve their financial situation and incentivize individuals to pursue or remain in teaching positions.

Implementation Considerations

  • Resources Required: The Arkansas Department of Finance and Administration would need to update computer programs, tax forms, and instructions to accommodate the new exemption. The estimated cost for programming changes was $8,000.
  • Education and Training: Department employees and the tax community would require training to understand the new exemption.

Legislative Actions

  • Introduced: January 22, 2025.
  • Committee Review: The bill was read and referred to the Committee on Revenue & Taxation.
  • Outcome: HB 1190 died in the House Committee at Sine Die adjournment on May 5, 2025, meaning it did not progress to a vote or further consideration.

Conclusion

While HB 1190 aimed to provide a significant tax benefit to teachers in Arkansas, it ultimately did not advance through the legislative process. The proposed exemption reflected an effort to support educators financially, acknowledging their critical role in the state's education system.

Compiled from official sources — confirm details with the bill’s official record.

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